Revenue

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February 7, 2022 - Week 1

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Revenue Coordinator, Josie Koehne


The House Committee On Revenue opened the session with public hearings on Feb 1.


Public Hearings and Jan 1


HB 4055 Extends privilege tax on all wood products harvested, i.e., extends the Forest Products Harvest tax (that was not renewed by end of session in 2021) for another two years retroactive to Jan 1 of 2022, through the end of 2023. Next biennium, the bill calls for an earlier House Revenue discussion of the three tax rates on the bill, so that this bill will not be rushed through without a public hearing as happened in 2021. Industry spokespersons objected to an earlier review date, citing it was important to wait for the May Revenue Forecast before setting the three tax rates on projected harvests. The tax revenues are distributed to the ODF Private Forest Division for implementation of the Forest Practices, and for forest research and for forestry education. The bill has a new Private Forest Accord (PFA) provision, Section 5, that adds an additional tax for implementing the mitigation work to protect fish streams in riparian areas, as required by the new PFA of $2.5 million annually in the harvest tax to fund the initial work mitigation work, and $5 million after an “incidental take permit” is issued by the federal Environmental Protection Agency (EPA). The fund is capped once a total of $250 million is reached. See this week’s Forestry section in our Natural Resources LR.


Public Hearings on Jan 3


HB 4056 is a marijuana tax adjustment for inflation for distribution to cities, counties and other entities before transferring the remaining marijuana account balance to Drug Treatment and Recovery Services Fund. This would be a revenue boost badly needed by counties and local governments for public services.

HB 4026 Because of our school equalization formula of funding per pupil across the state, school districts devastated from the 2020 wildfires stand to lose at least a third of their school funding for this year and next, from families forced to leave their districts due to wildfire. To remedy this, HB 4026 sponsored by Rep. Marsh and many others, directs the Department of Education to award grants to wildfire-impacted school districts in amounts to cover their funding decreases and assistance grants as needed. The bill sunsets on July 1, 2025.


Public Hearings on Jan 4


HB 4115 is a government financial transparency bill that directs the Oregon Investment Council to publish a complete list of assets held in investment funds, so taxpayers can advise on adjustments to address future investment impacts from climate change, such as fossil fuel investments that may no longer be profitable, see League support.


Senate Finance and Revenue


Informational hearings were held on SB 1525 and SB 1569. SB 1525 updates Oregon’s connection date to federal Internal Revenue Code and other provisions of federal tax law. LRO made a very long and extremely complex presentation on Oregon’s changes to our rolling connection to the federal income tax laws, which have seen many adjustments over the years.


SB 1569 will address the lack of ethnic income data, presented by Rep Pham, allows income taxpayers to voluntarily report how they self-identify, by reporting their race/ethnicity (up to three) to the Dept of Revenue on their income tax form. The ethnicity data captured is meant to help evaluate how our income tax laws are working, who benefits and who does not, so that changes can be made to address historical tax disparities that have been built into our tax codes.


Hearings on Monday 2/7


Public hearings with Work Sessions were held on these three senate bills and along with public hearings on three other bills, and a senate joint resolution.


Stay tuned for the March Revenue Forecast from the Office of Economic Analysis at 8 AM on Wed. Feb 9 in Senate Committee on Finance And Revenue held jointly with House Revenue. The forecast is important to spending and budgeting decisions and is used to predict whether the kicker “will kick”, based on actual collections from the previous year.